What is Zombie Debt?

Zombie debt refers to old debts that are typically written off or past the statute of limitations but are still pursued by debt collectors.

Have you ever received a phone call or letter from a debt collector about a debt that you don't even remember owing? You may have encountered what is known as "zombie debt." Zombie debt is old debt that may have been forgotten about or already settled, but has been resurrected by debt collectors in a last attempt at collection. Find out what it is, how it affects you and what you can do to protect yourself from this lingering financial burden.

What Is Zombie Debt?

Zombie debt, also known as "phantom debt" or "dead debt", refers to old debts that are revived by debt collectors who purchase them for a fraction of the original amount. Often past the statute of limitations, these debts can't be legally enforced. 

How Zombie Debt Works

Once a debt is considered past the statute of limitations, the original creditor may sell the debt to a debt collection agency for a significantly reduced price. The debt collection agency then tries to collect on the debt, often using aggressive and sometimes unethical tactics to pressure the debtor into paying.

It's important to note that zombie debt is often inaccurate or outdated. Debt collectors may attempt to collect on debts that have already been paid off, discharged through bankruptcy or are simply not valid. In some cases, they may even try to collect on debts that do not belong to the debtor at all.

Common Types of Zombie Debts

Here are some examples of debt that zombie debt collectors try to collect:

• Discharged or settled debts: These are debts that have been resolved through bankruptcy, negotiation, or repayment, relieving the debtor from legal obligation to pay.
• Time-barred debts: These are debts that are no longer legally enforceable due to the expiration of the statute of limitations, which varies by state. Once the statute of limitations has expired, creditors can no longer sue to collect the debt. However, paying or acknowledging a time-barred debt can reset the statute of limitations, making the debt enforceable again. This is called "re-aging" the debt and should be avoided to prevent legal action from creditors.
• Debts that have fallen off your credit report: Unpaid debts typically fall off your credit report after seven years. However, even though these debts are no longer reflected on your credit report, debt collectors can still try to scare you into paying them.
• Debts that do not belong to you: In some cases, the debt collector may have mistaken you for someone else with a similar name or information, or it could be a sign that you have been a victim of identity theft. Regardless of the reason behind the call, it is important to remember that you are not responsible for paying a debt that is not yours.

Tactics Zombie Debt Collectors Use

Zombie debt collectors or debt scavengers often use aggressive and sometimes illegal tactics to try to get consumers to pay up. Here are some tactics that zombie debt collectors commonly use:

• Harassment: Zombie debt collectors may harass consumers with frequent phone calls, emails, or letters. They may also use abusive language or threaten legal action if the consumer does not pay the debt.
• Threats: Some zombie debt collectors may threaten consumers with arrest, wage garnishment, or legal action if they do not pay the debt. These threats are usually empty and illegal, but they can be frightening for consumers who do not know their rights.
• Misrepresentation: Zombie debt collectors may misrepresent themselves as attorneys, government officials, or even the original creditor in order to scare consumers into paying the debt. They may also provide false information about the debt, such as its amount or the consequences of not paying.
• Unauthorized withdrawals: Some zombie debt collectors may try to withdraw money from a consumer's bank account without permission. This is illegal and can result in serious financial consequences for the consumer.
• Ignoring consumer rights: Zombie debt collectors often ignore consumer rights under the Fair Debt Collection Practices Act (FDCPA), such as the right to dispute a debt or request verification of the debt. They may also fail to provide written notice of the debt or the original creditor.

How to Protect Yourself from Zombie Debt Collectors

If you find yourself being harassed by zombie debt collectors, here are some things to keep in mind to protect yourself:

• Familiarize yourself with the Fair Debt Collection Practices Act (FDCPA) and know your rights. This Act prohibits debt collectors from engaging in abusive, unfair or deceptive practices when trying to collect a debt.
• Learn about the statute of limitations on debt collection in your jurisdiction, so you know when a debt is legally unenforceable.
• If a zombie debt collector contacts you about a debt that you believe is expired or already paid off, request for validation of the debt. They are required to provide you with documentation that proves you owe the debt.
• If a collector contacts you about an old debt, don't acknowledge it or make a payment before validating it. If you make a payment or acknowledge the debt, you could reset the statute of limitations, making it legally enforceable again.
• Keep detailed records of all communication with the debt collector, including phone calls, letters and emails. If they are engaging in harassment or violating the FDCPA, you will have evidence to support your case.
• Keep meticulous records of all financial transactions, including settlements and debt write-offs, so you can easily dispute illegitimate claims.
• If you believe the debt is invalid, dispute it with the credit bureaus and the debt collector. They are required to investigate your claim and provide evidence that the debt is legitimate. Software tools such as SoloSuit can help individuals navigate debt disputes. The tool can guide you through the process of filing a response and provides additional resources for further assistance.
• If you are being harassed by zombie debt collectors, consider seeking legal help. A consumer protection attorney can help you understand your rights, negotiate with the debt collector on your behalf and take legal action if necessary.

The Bottom Line

The best defense against zombie is to be proactive and stay informed about your debts. Keep detailed records of your financial transactions, dispute any inaccuracies on your credit report and be aware of the statute of limitations for debt collection in your state. It's also important to communicate with creditors and collectors to address any outstanding debts and find a resolution. By staying vigilant and informed, you can protect yourself against zombie debt.

Frequently Asked Questions